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The authors contend that value systems and styles of social responsibility of managers have gone through three historical phases--Phase I, the profit maximizer style; Phase II, the trusteeship style; and Phase III, the quality of life style. Phase III values will become more accepted by business managers of the future. [ABSTRACT FROM AUTHOR]

The article discusses the optimal deposit rate for a profit-maximizing savings institution. Previous writers have offered competing analyses. Some say the is a function of exogenous shifts in the public's demand for deposits, while Patric Hendershott has commented that such shifts in demand do not affect the optimal rate if the demand function is logarithmic. The author takes issue with this latter interpretation, arguing that Hendershott's conclusion fails to hold given certain assumptions about the profit-maximization model.

In a recently developed marketing planning model, demand and market share response functions are estimated from empirical data for airlines in one two-city market. These structures are then utilized in a normative model of marketing decision making. The results show profit-maximizing levels for number of flights and dollars of advertising. [ABSTRACT FROM AUTHOR]

Determining the optimal marketing mix for a firm requires information about the sales effects of the marketing policies under consideration. A model and estimation procedure to obtain such market intelligence for frequently purchased products are described and some empirical results are discussed. [ABSTRACT FROM AUTHOR]

The percentage of the audience of any TV program who watch another program on another day of the same week is approximately equal to the rating of the second program times a constant. For programs on different channels, the constant is one. [ABSTRACT FROM AUTHOR]

This paper discusses the relationship between sales costs and profitability in profit-type R & D organizations. Simple formulas are presented to show the relationships among some of the more important factors which determine profitability and growth. [ABSTRACT FROM AUTHOR]

Conceptual models and empirical studies of the relationship of shelf space allocation to unit sales are reviewed in this article. This knowledge is organized to support specific recommendations for the practical management of shelf space for profit maximization. [ABSTRACT FROM AUTHOR]

Several recent developments in marketing information systems and analytical marketing models are described. These developments in combination with others reported in this JOURNAL OF MARKETING symposium will cast the future marketing executive in the role of a market engineer. He will have a heavier involvement in planning rather than doing, and in profit maximization. [ABSTRACT FROM AUTHOR]

The author shows how selective planning can be accomplished effectively through the INTENSIVE COMPETITIVE MARKETING AUDIT--a technique which calls for study of the total marketing activities of a company and its major competitors at each level of distribution. A basic check list is included. Answers to the questions asked should result in the pinpointing of profit opportunities in specific markets through the identification of competitive vulnerability. [ABSTRACT FROM AUTHOR]

If decisions of marketing managers are to be influenced by predictions based on theoretical models, it is important that the assumptions in the models be accurate. Marketeers must reformulate concepts in such models to make them empirically meaningful, as the author of this article shows. [ABSTRACT FROM AUTHOR]

Do most sales managers try to maximize sales volume to the detriment of profits? The authors do not think so. Methods are proposed For shifting incentives from sales volume to profits through better utilization of data available from electronic data processing systems. [ABSTRACT FROM AUTHOR]

The contributions of marketing research to managerial effectiveness can help to raise profits, but research itself is not a decision-making function. The decisions to use the outcome of research wisely must properly be made by management. But will management learn to deal effectively with the future? Can marketing efforts be organized to handle successfully the radical changes in business that tomorrow will bring? These are the questions. [ABSTRACT FROM AUTHOR]

The total marketing concept acknowledges that the business of business is the creating and fulfilling of product user needs and desires at a profit, and that every part of a business should be oriented to this objective. Accurate problem definition is a requisite to any good business decision. Once the basic problems have been determined, we are well on the way toward solving them. This article illustrates how the Agricultural Division of the American Cyanamid Company utilizes the total marketing concept and the principle of problem definition in operating a highly diversified business with widely varying market segmentation and marketing mix requirements. [ABSTRACT FROM AUTHOR]

The article gives an example on how a company created its sales territories for maximum efficiency. The methods employed by the company in the past included separating the territories by individual categories such as geographical layout, dollar sales volume of accounts, and by district sales manager's task assignment, with each developing serious flaws. The task force in charge of determining the optimal methods for determining sales territories decided on three potential methods: the assignment of salesmen based on present call load, based on present and potential call load, and based on an incremental cost versus profit basis.

Apparently only a small percentage of businessmen know what airfreight can accomplish. The author reveals how it can be used profitably when the marketing approach, or total-cost concept, is used. [ABSTRACT FROM AUTHOR]

This article presents a brief survey of the structure of today's food market. The authors indicate where change is taking place, and point to some adjustments that may be warranted. The dynamic merchandising techniques which characterize the business of food distribution, particularly at the retail level, are having repercussions throughout the marketing structure. The income of the agricultural producer is becoming continually more sensitive to the profit determinants of the retailer. Strengthened lines of communication from top to bottom are a requisite for profit maximization at all levels. The specifications of retail demand provide strong impetus for closer coordination between producers and marketing firms. Established marketing institutions in direct contact with the producer are obliged to make a critical appraisal of their organization and services in view of the changing nature of retailer demand. [ABSTRACT FROM AUTHOR]

The article discusses the concept of marketing theory and its relations to economic theory, purchasing, production, the distribution of goods, consumption and related economic concepts. The requirements of a marketing theory are evaluated. Several factors which are reportedly critical to marketing policy are addressed; they include technical capacity, organizational possibilities and financial position, among others. Managerial policy is discussed with its primary goal being the long term profitability of the organization.

The future for non-foods in super-markets appears very bright, even though a few chains and some independent operators are still reluctant to give these lines a great deal of importance in their stores. Much research must be conducted to determine the marketing techniques which best lend themselves to self-service merchandising of non-food lines. Great strides in this direction are being made by both manufacturers and grocery retailers. It seems reasonable to conclude that there probably will be a heavy emphasis on the servicing of non-food departments, since non-food items do not, in general, fit into the same category as grocery products. It is difficult to predict the extent to which the servicing of these departments will be handled by the manufacturer or if the chains will do it themselves. Probably both methods will be used, depending on the type of line being merchandised. Also, it would appear that the rack jobber will continue to service at least the independent and small chain supermarket field. [ABSTRACT FROM AUTHOR]

The article investigates the planned ratio of advertising outlay to sales revenue as it relates to the product classification of the advertising firm and the total size of its advertising spending. The author analyzes the variance of ratio to sales between advertisers of durable and non-durable consumer goods. A discussion is presented about the differences between consumer advertising and industrial advertising. Statistical information related to advertising ratios of various types of products is presented.

The article reports on distribution cost analysis and cost accounting, which can be applied to justify price differentials under the Robinson-Patman Act. The author reports that marketing expenses are typically aligned with the number of customers or orders, and not the volume of sales. The goal of distribution cost analysis is to determine which sales are unprofitable. The procedures for determining individual product sales profitability are presented. Management interpretation of distribution cost analysis is discussed and the author suggests management will use this data to maximize profits in either the short or long term.

The article presents a method of increasing sales activity in a firm. Using a case study from an unidentified firm, the author points out that the sales effort in this firm were misguided. He shows how the percentage of annual sales to particular clients were not in proportion to the amount of time, effort, and cost of making the sales calls. The cost of each sales call is broken down and reapplied according to the performance of previous years. Furthermore, estimates are made toward the amount of effort applied towards prospective clients and the amount of sales that these clients will generate. The author expresses that while this method will not improve the sales techniques of the salesman, it will help to prevent misguided sales efforts, and large losses of time and cost.

One of the problems which has plagued microeconomic theory is the difficulty in achieving close correspondence between formal models and practical market situations. The most widely accepted models envisage the firm set in a static mold with the implication that profits will be maximized in every period. The model is more generally acceptable in the case of perfect competition, for then the market results are most likely to be "as if" the firms acted marginally to maximize profits. Only the profit maximizers will survive. While such a scheme may lead to realistic results in the case of perfect competition, this condition does not bulk large in the United States economy. [ABSTRACT FROM AUTHOR]

The article focuses on two analytical models that evaluate credit risk and the associative relationship between profits and opportunity costs and the number of credit applicants accepted. The optimal acceptance number for granting credit is used to determine the maximum acceptable probability of default. Three profit components or credit-related profits are present value of future profits from sales and credit granted in the current period and present value of profits resulting from cash sales. Variables in the expressions and equations for maximizing credit-related profits are explained, as well as the opportunity-cost mathematical model and matrix. The concept of maximin strategy is mentioned.

The article presents a model developed to examine the feasibility of adapting a rigorous model technique to commercial bank loan policy. The model is designed to indicate the earning asset holdings subject to restrictions that will maximize commercial bank profits. Several equations utilized are discussed, including those which define the cost of negotiating, default, interest rate variables, and the administering of loans. The author notes that analysts typically discuss asset management decisions to be faced by a bank's manager and the reasons for the problems involved.

This paper is a discussion of the external or side effects of business and rational responses to these external effects for profit-maximizing firms. Some people would argue that the rational response for the profit-maximizing firm is to do nothing about its external effects until required by law; whereas others, as we in this paper, argue that the rational response for the profit-maximizing firm is to take some action. The first section of the paper deals with the meaning of externalities, of which pollution is a fundamental type, and the phases of a solution to such problems. In the second section, the paper deals with rational responses for the profit-maximizing firm regarding its externalities, in which many aspects of the popular arguments against the rationality and the practicability of independent corrective action by a firm are examined. [ABSTRACT FROM AUTHOR]

A conference paper about corporate accounting is presented. It discusses the empirical research used in the research on accounting methods and their impact on financial accounting as an industry. It examines the statements and hypotheses generated by other research papers on corporate accounting including comments on the success of other papers and the future of research in the accounting field.

The article discusses accounting methods and the theory of the firm. Managers and their policies and decisions are looked at in terms of whether or not the results are compatible with the notion of profit maximization for the owners of the firm. Owners are unaware of alternative policies in order to maximize profit so they rely on their managers. Managers are under the advantage of being able to choose the accounting method which appears on the corporation report and insure the happiness of stockholders.

The article investigates the consistency of corporate giving with economic behavior in the U.S. The article also questions the usefulness of accounting logic to persons interested in evaluating managerial decisions in the presence of opportunities for profit. A simple model is developed which shows how giving may be more profitable than selling. The author considers the framework for full accounting disclosure of product contributions. The article also derives a hypothesis from the model and tests it with correlation analysis. A situation in which Cuba held prisoners for ransom during the Bay of Pigs invasion is discussed, focusing on the contribution of organizations towards their demands.

In my paper I have presented estimates of the elasticity of donations with respect to a set of variables--price, advertising, cash-flow, and income--in an attempt to evaluate the relative importance of two major aspects of corporate philanthropy, the profit maximizing expenditures orientation, and the utility maximizing consumption orientation. Table I presents summary statistics derived from a time series analysis of all industrial groups and eight major industrial groups. The data, ordered in accordance with J&J's market structure classification system, consistently indicate that contributions are price elastic, income inelastic, and that the cash-flow response is more elastic than the income response. Advertising was not included in the time series tests because of its minimal variation in these samples. [ABSTRACT FROM AUTHOR]

On the question of optimal investment in a firm there are broadly two trends of thinking in the existing literature. In one, the maximand is a static utility function; and in the other it is the growth rate of sales revenue under the conditions of long run profit maximization. Above we have proposed a model of optimizing the investment with reference to a dynamic utility function over an infinite time horizon. If, however, the time horizon is finite the same criterion can be used; but obviously the results would be somewhat different depending largely upon the postulated transversality condition. We have then examined a special case of our model where the utility and production functions are specified in a certain way. It is found that then under certain assumptions the three criteria--Lintner-type current utility maximization, Baumol-type growth rate optimization, and our dynamic utility maximization over an infinite time horizon--fully agree in terms of their respective decision rules. [ABSTRACT FROM AUTHOR]

The article presents a wealth-maximizing portfolio management model based on principles of cumulative risky investment venture consequences. The model addresses several elements within investment decision making, including calculations in regards to financial leverage, stock diversification, transaction costs, and holding period lengths. Six strategic criteria are presented on which to base portfolio decisions, including general and estimated measures of borrowing/lending balances, long-run wealth maximization, equilibrium interest rates, portfolio ranking, and others.

The article refers to a balance-sheet approach to the finance function and discusses profit planning. A break-even formula based on interrelated product sales, as well as variable and fixed costs, can be used in budgeting and for improving accounting presentations, measuring efficiency with an analysis of actual production and volume at the break-even point, and determining volume-cost relationships which show the profitability of product lines and focus on cost differentials. Profit planning tools include the direct-costing income statement and flexible budget. Mathematical models of individual-product and factory-wide break-even points, which consider multiple-product manufacturing plants and sales-cost distributions, are explained.

The article refers to research by Lerner and Hendriksen on after-tax rate of return on investment and focuses on how corporate income tax can be shifted. The two forms of shifting the corporate tax burden are related to production costs and consumer prices. The tax burden can be redistributed across businesses or forwarded to consumers. The logic for shifting costs to consumers is that society benefits when corporate profits are retained for new investments. The cost-price relationship in tax shifting, rationale for increasing aggregate demand and widening the spread between sales revenue and cost of production, and the long-run effect of taxing corporate profits on the after-tax rate of return on investment are mentioned.

The article focuses on the impact of transactions costs and the demand of the firm for money on inventory theory. In the article's research the firm is treated as a profit maximizer and the demand for money is derived from a general transaction cost function. The article explains that this approach is taken because it allows one to derive the effect of changes in the transactions cost function, or other parameters the firm is facing, not only on the demand for money, but on output decisions as well.

A framework is indispensable in pursuing share price maximization. By making explicit many of the interdependent effects of management decisions concerning the investment and financing activities of the firm, the framework presented in this article is an ideal tool to evaluate the impact of management decisions upon the firm's stock price. [ABSTRACT FROM AUTHOR]

The writer believes that much that has been written about reciprocity ignores some of the problems inherent in its use. These problems include knowing when reciprocity is expected, how power is balanced in the buyer/seller relationship, reconciling reciprocity with profit centers, administrative costs, possible increased buying costs, and organizational difficulties. [ABSTRACT FROM AUTHOR]

A management consultant urges businessmen to take the initiative in solving urgent social problems. One of the most effective ways this can occur is by companies discovering areas of convergence where gains in the traditional goal of profit-making coincide with progress towards social goals. [ABSTRACT FROM AUTHOR]

GERT simulation is an effective technique for planning the time and cost requirements of a new product introduction, which may involve evaluating alternative configurations of the component activities. Simplicity of data input and a similarity to PERT are important advantages to the user. [ABSTRACT FROM AUTHOR]

This article presents information on corporate profits and employee satisfaction. The authors examine the notion that executives would rather maximize their profits rather than invest in their employees job satisfaction. They discuss how the simplification of many work processes, while intended to improve an organization's profits, often result in a lack of satisfaction on the employee's end. The breaking down of work into small tasks makes the worker's job repetitive and easily replaceable. While this process is designed to improve quality it also results in a decrease in morale. The authors examine how it is actually not profitable for companies to continue to use these practices because of the costs related to turnover, absenteeism and the eventual drop in product quality.

The article discusses the problems inherent in attempting to adapt American and Western European managerial practices and knowledge into companies in developing countries. One problem is that many companies in developing nations have a short-term profit view, which interferes with long-term planning and the overall health of such companies. Another problem is an overabundance of technocrats that put self-interest above company goals. Additionally, many developing countries have government policies in place that limit free enterprise and free trade.

The author reports on the place in which profit making business enterprises play in society. The view that for profit organizations do not care about society, and that all they want is to make a profit is discussed. Purposes which a company's profits can serve are discussed, including as a way to measure resource allocation and as a distributive share of income. Various ways in which companies determine the amount of profit which they made are mentioned. Objections which people have regarding for profit organizations are discussed, including that an organization is more interested in profits than helping people. Functions which profits play within an organization are mentioned.

The article discusses effective corporate growth strategies. Researchers studied a 1964 sample of 53 leading U.S. growth companies. The firms studied were successful in achieving rapid expansion in sales and even more rapid expansion in total profits per share. The study sample indicated that firms succeed in their quest for rapid expansion by adopting certain business strategies including choice business field, choice of a fast-growing market segment within the areas served by the industrial sector, and sale of new products to old markets.

It's up to the marketing staff to maximize a firm's total revenue net of selling costs, and this often calls for statistical as well as sales know how, for many factors must be equated and others, such as fixed and variable costs, juggled to produce the most advantageous net possible. Outlined here is a framework within which to view marketing situations and some strategies to help keep the percentages in your favor. [ABSTRACT FROM AUTHOR]

The article reports on aspects of corporate long range profit planning practices. The increased attention to long range planning is a result of declining returns on net worth, changes in consumer attitudes and preferences, new product development, and integration and diversification. The phases of long range planning include determining profit objectives, proprietary directions for corporate growth, planning new products, and programming requirements of business functions. Long range planning is particularly advantageous in terms of the benefits it provides in stabilizing profits at high levels.

This paper describes a project that was performed to maximize profit from the manufacture of a particular type of fork lift truck, with consideration given to manufacturing quantity, range of sizes and sales price. Sales revenue and manufacturing costs were evaluated for each size of truck at different sales levels. The optimal range of sizes was then determined using a dynamic programming approach. The results of the study together with an outline of how the work may be extended in the fixture are discussed. [ABSTRACT FROM AUTHOR]

This paper develops a procedure for locating profit maximizing operating conditions when the input variables are subject to control by the experimenter and observations on physical output may be taken subject to experimental error at any combination of these inputs. This procedure uses the Box-Wilson technique, a well-known statistical search procedure, together with the price of the output and the cost of the inputs so as to search for maximum profit points rather than maximum output points.
The result is an experimental search method which maximizes profit when the functional form of the physical response surface (production function) is unknown. In this case, of course, standard mathematical programming models are of no use in the absence of the required functional forms. This functional form, though unknown, is determined by the existing investment in capital equipment.
These procedures, like the Box-Wilson technique, are more likely to be applicable to flow process reactor systems in the chemical and oil industries, but are certainly not limited to such applications. [ABSTRACT FROM AUTHOR]

Two inventory control models are discussed, for continuous demand and for instantaneous demand. It is shown that minimizing the cost due to the uncertainty of demand is a special case of the criterion of profit maximization. Certain major assumptions, outlined in the conclusions, are used to define the situation but these may be modified to extend the applicability of the results. [ABSTRACT FROM AUTHOR]